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Wednesday, April 14, 2010

Toll operators enjoying good profits

THE issue of toll increase and the burden on the Government if toll increases are not approved is a constant debate in the media and among consumer groups.

Many a times, it is said that toll prices have to go up as it costs a lot for the concessionaires to service debts and pay for maintenance. But the evidence seems to indicate otherwise.

The recently issued Summary Review Annual Report 2009 of PLUS shows that it raked in RM1.185bil in profit after tax and interest in the year ended Dec 31 last year compared with RM1.080bil in 2008. PLUS also has a cash reserve of RM2.851bil in short-term deposits. The company can even reduce rates and still make money.

Does this look like an entity that is making losses or not enough money?

If this is owned directly by the Govern­ment, then toll prices can be reduced annually by RM1bil and the operations can still be carried out. It can break even without any government subsidy.

PLUS is not a private company. The annual report indicates that as of March 5, Khazanah held 55% interest while 29% is held by government-related institutions such as the EPF, PNB, Tabung Haji and Socso.

The Government does own PLUS. It is a good dividend generator and any compensation paid is merely the left paying for the right. Surely there is a better way to charge toll and setting the rates rather than ever increasing it.

By right when the number of vehicles increases, toll should come down as total revenue still goes up, albeit extra maintenance is required for heavier usage.